ID :
210930
Tue, 10/04/2011 - 00:45
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https://oananews.org//node/210930
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Bank loan delinquency rate gains in Aug.
SEOUL (Yonhap) - South Korean banks' loan delinquency rate rose for the second straight month in August from a month earlier due mainly to seasonal factors and a rise in credit risks held by ailing firms, the financial watchdog said Tuesday.
The overall delinquency rate of bank loans to companies and households stood at 1.22 percent as of the end of August, up 0.09 percentage point from the previous month, according to the Financial Supervisory Service (FSS).
The rate is measured based on loans that are overdue for more than one day.
The increase came after the loan delinquency rate hit a six-month low of 0.97 percent in June, when banks tend to clean up their balance sheets at the end of the first half.
The delinquency rate also rose due to an increase in credit risks held by ailing firms. Local banks conducted an annual corporate risk assessment and announced the results in June.
The delinquency rate on banks' household lending came in at 0.8 percent as of the end of August, up 0.03 percentage point from the previous month, the watchdog said. The data marked the highest level since 0.88 percent in February 2009.
The default rate of bank corporate loans rose 0.15 percentage point to 1.59 percent. The corresponding rate for lending to larger companies stood at 0.59 percent, up 0.2 percentage point from July. The delinquency rate of loans to smaller firms gained 0.14 percentage point on-month to 1.85 percent, the watchdog said.
"The FSS will keep monitoring potential distress in vulnerable sectors such as real estate project financing loans and delinquency ratio by sector and encourage banks to proactively resolve delinquent and non-performing loans," the watchdog said in a press release.
Meanwhile, the FSS said local banks' loan delinquency rate is lower compared with their global counterparts. The ratio of local banks' loans overdue for more than three months stood at 0.6 percent as of the end of the first quarter, the third lowest level among 59 countries tallied in the International Monetary Fund's Financial Soundness Indicators.
The overall delinquency rate of bank loans to companies and households stood at 1.22 percent as of the end of August, up 0.09 percentage point from the previous month, according to the Financial Supervisory Service (FSS).
The rate is measured based on loans that are overdue for more than one day.
The increase came after the loan delinquency rate hit a six-month low of 0.97 percent in June, when banks tend to clean up their balance sheets at the end of the first half.
The delinquency rate also rose due to an increase in credit risks held by ailing firms. Local banks conducted an annual corporate risk assessment and announced the results in June.
The delinquency rate on banks' household lending came in at 0.8 percent as of the end of August, up 0.03 percentage point from the previous month, the watchdog said. The data marked the highest level since 0.88 percent in February 2009.
The default rate of bank corporate loans rose 0.15 percentage point to 1.59 percent. The corresponding rate for lending to larger companies stood at 0.59 percent, up 0.2 percentage point from July. The delinquency rate of loans to smaller firms gained 0.14 percentage point on-month to 1.85 percent, the watchdog said.
"The FSS will keep monitoring potential distress in vulnerable sectors such as real estate project financing loans and delinquency ratio by sector and encourage banks to proactively resolve delinquent and non-performing loans," the watchdog said in a press release.
Meanwhile, the FSS said local banks' loan delinquency rate is lower compared with their global counterparts. The ratio of local banks' loans overdue for more than three months stood at 0.6 percent as of the end of the first quarter, the third lowest level among 59 countries tallied in the International Monetary Fund's Financial Soundness Indicators.
